Licences add more strength to ARM

Chip designer ARM Holdings yestesrday said stronger-than-expected licensing of its designs helped drive a 14 per cent rise in second-quarter revenue and growth for the year would be in line with expectations.

Chip designer ARM Holdings yestesrday said stronger-than-expected licensing of its designs helped drive a 14 per cent rise in second-quarter revenue and growth for the year would be in line with expectations.

ARM, which sells designs and intellectual property to chip makers, said that second-quarter revenue excluding acquisitions and share-related charges rose to £65.7 million, £57.8 million a year ago.

Chief executive Warren East said revenue growth had been driven by strong licensing of the Cambridge-based firm's newer breed of micro-processors - the brain in a electronic device.

"Strong licensing of our newest processors and physical IP has helped to generate sequential increases of more than 15 per cent in licence revenues and more than ten per cent in the group's order backlog," he said in a statement.

"We remain confident of achieving a year of strong growth for ARM in line with current market expectations," he added.

Finance officer Tim Score added that licensing would return to more typical levels in the next two to three quarters after hitting 21 processor licences in the second quarter.

"If you go back over a number of years ARM tends to do somewhere in the range of 15 to 20 licences per quarter and I think we are quite likely to stay in that range."

Licensing revenues, which disappointed analysts last time around, pleased on this occasion at £28.6 million, while royalties from its physical intellectual property division (PIPD) - basically on chips - jumped 39 per cent to £4.3 million.